Wine War Fermenting Between US and Canada

By Neat Pour Staff
| Published October 3, 2017

In the 1995 John Candy-Alan Alda classic Canadian Bacon, Candy sparks a war between the United States and Canada over beer quality. Now in 2017, wine is poised to play a key roll in a trade war between the two nations. On Monday, the US filed a complaint against their northern neighbors with the World Trade Organization (WTO) for providing an unfair advantage to Canadian winemakers.

At the heart of the grievance are regulations in British Columbia which prohibit any foreign wines from being sold on “regular” supermarket shelves. Instead, foreign wines must be sold in a “store within a store.” The Office of the U.S. Trade Representative described these mini-stores as “physically separated from the grocery store, has controlled access, and separate cash registers.”

The complaint is actually the renewal of a prior petition filed in the waning days of the Obama administration. That filing was joined by Argentina, Australia, the European Union and New Zealand.

At the time of the original complaint, the U.S. State Department had harsh words for the Canadian effort. “American winemakers produce some of the highest-quality, most popular wines in the world. When U.S. wine producers have a fair shot at competing on a level playing field, they can compete and win in markets around the globe,” said then-Ambassador Froman. “The discriminatory regulations implemented by British Columbia intentionally undermine free and fair competition, and appear to breach Canada’s commitments as a WTO member. Canada and all Canadian provinces, including BC, must play by the rules.”

With $431million worth of wine exported to Canada in 2016 alone, the nation is the top foreign market for American wines.

However, the original complaint was shelved due to inaction from the new administration. The new complaint, almost identical to the first in wording, effectively resets the clock. The two nations now have 60 days to settle the matter through “consultations.” If that fails, the next step would be court hearings.

Of course, the price of wine in Canada is one aspect of a greater issue. Trump’s campaign included much saber-rattling about renegotiating the North American Free Trade Agreement (NAFTA). (Ironically, Canadian winemakers are typically critical of NAFTA while American winemakers cite NAFTA as the driving force behind a $200 million+ increase in wine exports across the northern border.) Last week, the U.S. Commerce Department threw anti-subsidy duties on Bombardier Inc’s C-Series jets, also agitating neighborly relations. And, Ontario is threatening to enact BC type restrictions on their supermarket wine sales as well.

If you’re of the school that thinks the timing on this is all a little suspicious, just turn back to Canadian Bacon. In the mid-nineties film, Alda’s POTUS explained that a war would be good for his polls, but he couldn’t reengage Russia in hostilities, leaving Canada as the easiest choice.